Basic Income Grant (BIG) Coalition Meets with the Ministry of Gender Equality, Poverty Eradication and Social Welfare to Discuss Universal BIG

BY: RINAANI MUSUTUA & BEN SCHERNICK, 4 October 2024 | Following nationwide protests, the last one taking place on Heroes Day, 26^th August 2024, petitions for a Universal/Unconditional Basic Income Grant (U-BIG) were handed to representatives of the Namibian government. A delegation from the BIG Coalition had this week (4 Sept.’24) met with the Minister of Gender Equality, Poverty Eradication and Social Welfare and high-ranking officials from her Ministry to discuss the need for, benefits of, and ways towards implementing such Universal Basic Income in Namibia.

The discussions were fruitful, and the Ministry gave an update on the background and status quo of current social protection mechanisms, as well as on identified challenges towards a truly Universal Basic Income Grant from the government’s perspective.

In turn, BIG Coalition members provided key information on why a Universal Basic Income not only serves as a highly impactful ‘grant’ (= key social protection mechanism) to provide much necessary means for all Namibians to survive and to live a more dignified life, but that a U-BIG is in fact a direct investment in and stimulus for the Namibian economy through all its people, in rural and urban areas alike.

The various advantages of such an unconditional BIG versus conditional grants were presented in detail, hereby highlighting its efficiency, as well as proven positive effects on people’s health, education, and abilities to find and create jobs for themselves, as well as leading to reduced rates of malnutrition and crime hereby reducing related costs.

In addition, various options of U-BIG financing were presented. The direct involvement of the Ministry of Finance and the National Planning Commission are crucial next steps to ensure that this innovative and transformational measure will be implemented as soon as possible, ideally at N$ 600 per month (previously N$ 500) for every Namibian.

Both the MGEPESW and the BIG Coalition emphasized the critical role of Civil Society as advocate for change and as an important smart partner to government and to other stakeholders, such as the private sector. The meeting concluded on a positive note, with a genuine commitment from both sides to explore feasible options of introducing a Universal Basic Income as early as possible.

After the meeting with the Minister and against the background of the upcoming national elections in November 2024, the BIG Coalition wishes to stress its political neutrality.

There is a real risk of BIG being instrumentalized for short-term political gain in either way, hereby using half-truths, assumptions or empty promises as part of political campaigns. This would not only be misleading voters but harmful to the entire nation.

Hence, the BIG Coalition will soon be organizing an educative information session to which political leaders and aspiring presidential candidates from all political parties will be invited to learn more about the impact of a future U-BIG and how to make it happen. 

*Ms Rinaani Musutua (esjtrust1@gmail.com) is a Trustee at the Economic and Social Justice Trust of Namibia (ESJT). Mr Ben Schernick (director@nafsan.org) is the Director of the Nutrition and Food Security Alliance of Namibia (NAFSAN). This article was submitted for the CIVIC BEAT Newsletter (September Edition) call for submissions.

7 October 2024 | WINDHOEK, Namibia - On 4 September during a public discussion, the leader of the Independent Patriots for Change (IPC), Dr Panduleni Itula, said that a universal basic income grant (BIG) was unaffordable and that those advocating for it would be misleading the public, particularly those living in poverty. Itula presented his calculations of a universal BIG as follows: Total population (3 million) x N$ 1,180 (BIG amount) per month x 12 months = N$ 42.4 billion per year. This would amount to over 40% of Namibia’s current budget.

We wish to point out that Itula’s calculations are simply wrong and do not take into account many cost aspects of the concept of the Basic Income Grant. Firstly, Itula confused gross and net costs and failed to acknowledge that payments made by the government to high-income earners would be paid back in taxes. The BIG has a redistributive element which favours those in lower income groups.

Secondly, Itula more than doubled the amount of the proposed Basic Income Grant when making his calculation. This was simply done to present the grant as unaffordable. We wish to clarify that for the past three years, the BIG Coalition has called on a universal BIG of not less than N$ 500 per month.

In terms of the actual costs, one has to look at the net costs, which is the actual burden on the Treasury. For example, if the government pays N$ 500 to a well-off individual but recoups the N$ 500 through income tax adjustments, there is no net-cost. The government pays with one hand and receives with the other. The real cost is where the government pays N$ 500 and does not get it back through taxation because it goes to people in need.

Assessing the actual (net) costs of a BIG, the calculation are as follows: Total population (3,000,000) minus the current social grant recipients (600,000), minus the top 10% income earners (300,000), from whom the funds can be recouped through tax adjustments. This leaves 2,100,000 net beneficiaries who would receive N$ 500 (BIG) per month x 12 months = N$ 12.6 billion. As this money is spent in the local economy, 15% is recouped through VAT payments, resulting in net costs of N$ 10.7 billion.

N$ 10.7 billion represents about 3.5% of GDP as predicted for 2025/26. While substantial, this amount is feasible and can be financed through budget reprioritisation, redistributive progressive taxation, revenue from natural resources and the prevention of illicit financial outflows which currently cost Namibia over N$ 10 billion per year.

Furthermore, the BIG would reduce the poverty-related costs in areas like education and health care where huge costs are incurred due to school failures and repetitions, treating poverty-related diseases etc. The Cost of Hunger Study (see www.nafsan.org/resources ) calculated costs of N$ 11 billion from stunting alone.

Given Namibia’s high levels of poverty and inequality, the Namibia Tax (NAMTAX) Commission argued back in 2002 that Namibia urgently needs to implement a universal BIG. Twenty-two years later, we must ask ourselves whether we are ready to act on this economic advice or if we have become so accustomed to the inequalities and suffering that we are willing to cement the status quo.

An economic stimulus
In the debate about the BIG, it is often overlooked that a universal BIG would be a massive stimulus to the Namibian economy. The grant would be spent largely on basic consumer goods and local investments thus circulating within local economies, and supporting small businesses and enabling their survival. The BIG constitutes an economic stimulus package “from below” and is a key enabler of income-generating activities which is precisely what Namibia needs to tackle the triple burden of unemployment, poverty and inequality.

We agree that the campaign for BIG should not be misused for cheap political gains, and this calls for a factual and honest debate on the costs and benefits of a BIG. Namibia can and must do better and voters have every right to expect more from political parties and their leaders. Politicians need to tell the electorate how they want to create a more equitable and just society when they are not even willing to implement a universal basic income grant.

Basic Income Grant Coalition of Namibia

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Media Contact
Rinaani Musutua
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